Between 2017 and 2022, the Federal Government has raised the sum of N742. 56bn from the issuance of Sukuk Sovereign Bond for the construction and rehabilitation of road projects and bridges across the country.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, disclosed this on Monday in Abuja during the symbolic cheque presentation ceremony of the 2022 Sovereign Sukuk issue proceeds of N130bn to the implementing Ministries.
She said the amount was spent on the construction and rehabilitation of key economic road projects in the six geo-political zones and the Federal Capital Territory.
In real terms, the Finance Minister stated that the amount has been used to construct and rehabilitate sections of 71 road projects covering 2,808.06 kilometers and 4 bridges by the Federal Ministry of Works and Housing and sections of six road projects covering 99 kilometers and 19 bridges by the Federal Capital Territory Administration.
Giving a breakdown of the amount to be issued, she said the FMWH and FCTA will be sharing the 2022 Sukuk Issue Proceeds of N130 billion, which was successfully issued by the Debt Management Office (DMO) on behalf of the Federal Government of on December 02, 2022.
According to her, the Federal Ministry of Works and Housing will get N110bn while the
Federal Capital Territory Administration is to receive N20bn.
She said, “I am proud to say that the Issuance of Sovereign Sukuk, a project-tied debt instrument, is one of the many innovative and very successful initiatives of this administration towards financing the development of critical infrastructure in the country.
“The facts on how much the initiative has helped to improve road infrastructure across the country speak for themselves.
“As at date, this administration has invested the sum of N612.557 billion raised through Sovereign Sukuk between 2017 and 2021 for the construction and rehabilitation of key economic road projects in the six geo-political zones and the Federal Capital Territory (FCT).
“The 2022 Sovereign Sukuk of N130 billion will be released as part of the Capital Expenditure in the 2022 Appropriation Act, which has been extended by the National Assembly to March 31, 2023.”
As at November 2022, the Finance Minister said about N1.88trn had been released as capital expenditure, which represents about 40 per cent performance when compared to the total Capital Budget of N4.7trn.
This, she added, informed the need to extend the period to implement the capital component of the 2022 Budget.
“It is important to add that beside the immense contributions of Sukuk to the funding of critical road infrastructure, the objectives of deepening the domestic capital market and financial inclusion are being achieved by the Government.
“The private sector and sub-nationals have begun to embrace the instrument and I look forward to seeing more issuances in this regard as this will provide additional asset class for the rapidly growing ethical investors and funds in the economy,” she added.
The Director-General, Debt Management Office, Petience Oniha said through the Sovereign Sukuk initiative, the DMO has demonstrated its strong alignment with the policy of President Muhammadu Buhari, on infrastructural development.
Furthermore, she said the DMO has positioned itself not only as an agency for managing the public debt including borrowing on behalf of the Federal Government, but as an active stakeholder in the domestic capital market through innovation, investor engagement and collaboration with other stakeholders.
These, she added, have deepened the market, created benchmarks for other borrowers and promoted financial inclusion by providing a retail product, FGN Savings Bond, as well as, Sukuk and Green Bonds for ethical investors.
Oniha said the DMO remains committed to its mandate and market development activities.